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TMI Blog2016 (3) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer under section 14A although on different grounds and dismiss this appeal of the Revenue. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in share trading business. As per profit & loss account, total expenses incurred exclusive of interest was ₹ 4.35 lakhs and interest paid was ₹ 59.08 lakhs. The assessee himself disallowed ₹ 5.76 lacs u/s 14A while submitting the return. Therefore the applicability of section 14A read with Rule 8D is not in dispute. However the A.O. has applied all the provisions of Rule 8D(i)(ii)and (iii) mechanically. The A.O. has not brought on record any evidence to show that the loans funds were used in investment in the mutual funds securities. There was investment of ₹ 17.95 crores mainly consisting of ₹ 17.87 crores in the mutual funds. No disallowance out of interest was made upto A.Y. 2008-09 which shows that ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee on proportionate basis were more than the expenses (exclusive of interest) claimed in the profit &, loss account since no evidence has been brought on record that the investments have come out of the loans taken by the assessee. In view of the above there is no necessity to deal with the calculation mistake made by the A.O. while taking out the average assets. The addition made by the A.O. is deleted". Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 5. At the time of hearing before us, the ld. D.R. strongly relied on the order of the Assessing Officer in support of the revenue's case on the issue under consideration, while the ld. Counsel for the assessee strongly supported t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal in the case of REI Agro Limited (supra), which has been affirmed by the Hon'ble Calcutta High Court, we hold that in the absence of requisite satisfaction recorded by the Assessing Officer showing how the disallowance offered by the assessee under section 14A was not correct having regard to its books of account, it was not permissible to the Assessing Officer in law to invoke section 14A and make a further disallowance. We, therefore, uphold the impugned order of the ld. CIT(Appeals) deleting such disallowance made by the Assessing Officer under section 14A although on different grounds and dismiss this appeal of the Revenue. 7. In the Cross Objection, the assessee has merely supported the impugned order of the ld. CIT(Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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